The growth in technology and a customer centric approach are fast defining the digital roadmap for most banking institutions. A McKinsey report suggests that “By 2018, banks in Scandinavia, the United Kingdom, and Western Europe are forecast to have half or more of new inflow revenue in most products coming from digital sales”. There is no doubt therefore that digital transformation for banks is at an inflection point.
— Digitize Banking (@Digitize2Thrive) June 9, 2016
However there are several factors that need to be kept in perspective if traditional banks need to craft success stories out of their digital strategies.
1.Ensure Enhanced Mobile Experience
Comprehending the full value of digitization is of the utmost importance for banks in order to proceed on their path of digital transformation. Increasing the bank’s connectivity quotient with its customers and employees is one of the leading value additions that can be attributed to the digital movement. Banks need to gear up to provide an enhanced mobile experience. The crucial ground rules that banks can adhere to in order to embrace digital transformation efficiently, include:
- Provide user friendly app interface
- Leverage social media presence to build more effective customer relationships
- Generate a healthy web or app traffic
- Keep pace with innovative technology
2.Customer Focused Approach
Remaining connected with their customers is a principal driving force motivating a bank to reach its digital milestones. Ensuring a personalised and differentiated customer experience is the first step towards ensuring that connectivity. Every customer should be made to feel unique through streamlined processes, specialised products and customised services. As part of providing enhanced customer experience, around 20% of banks will start trying video banking to automate human interaction by 2017.
3.Change in Organisational Culture
Banks need to include a new culture fostering a vision of digital transformation within its ambits. Leaders need to take the lead in opening dialogues of a digital vision with individual internal departments to ensure a comprehensive appreciation of the values that going digital will levy on the organization. This has to be a top-down mandate that will uniformly spread the message of digital cohesiveness throughout the institution.
4. Adopt Flexibility in Operating Models
Banking Operating Models need to undergo a makeover. They need to be made more flexible in order to adopt the dynamism of the digital transformation. Banks need to move away from their waterfall models featuring long gaps between releases towards the weekly sprint culture of an Agile IT platform. Within the next 5 years, 50% of all new applications that will be launched by Banks would be Cloud-First applications.
However, though rapid iterations in developing technology is the need of the hour, banks also need to be prepared to build their tolerance to failure. They should be able to adopt a trial and error method in order to learn how to cope with the challenges of digitization.
5. Product customisation based on Advanced Analytics
As banks continue to leverage their access to multiple channels, data is now at a surplus. Most of these however, can be effectively used for advanced analytics to help in further customisations of their products and services for cross-selling or up-selling.
6.Continuous focus on Innovation
Technology is dynamic. Banks should therefore continuously innovate and experiment to remain relevant. Big Data in banking can aid them in their bid for innovation to help them accelerate their digital strategy.
Has your organisation adopted any of the aforementioned strategies to become digitally transformed? Share with us in the comments below.
Author: Kishore Kapoor
Kishore Kapoor an industry veteran of 31 years in global banking technology. A Founder & CEO of eKutumb.com – World’s first marketplace for enterprise software delivery and consulting business by creating value for all of industry stakeholders involved (customers, partners, individuals and investors) through a disruptive and trans-formative approach of doing business.